analyticsbox | Sep 15, 2021
The Good Economist vs. The Bad
The Seen and the Unseen
Henry Hazlitt, a well known economist, wrote in his classic ‘Economics in One Lesson’ the following:
...there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.
He’s talking about the difference between good economics and bad. The bad economist sees only what immediately strikes the eye, while the good economist looks beyond…at the longer and indirect consequences.
What we see from proposals coming out of Washington these days seems to be very bad economics as they ignore the long term effects of the enormous expenditures proposed.
We are looking at good intentions, maybe, but ignoring the likely consequences. This is not good for the long term prosperity of our country.
For example, the current proposals are for an additional 6+ Trillion dollars for all sorts of things.
(The 3.5 Trillion Human Infrastructure proposal is really 5+ Trillion. This is because to keep it down to ONLY 3.5 Trillion, they assume certain programs will end in a few years - BUT government programs don't end! The real cost is 5+Trillion!!!).
There are some taxes proposed to offset some of this (which are also not good economics, but that is a whole another story).
The Congressional Budget Office projects Trillion dollar deficits as far as the eye can see if these programs are all enacted.
And the politicians spin this as good policy! This is more PBS (Political Bull S--t) and bad economics for this country.
THE BOTTOM LINE
When will the bubble pop?
We must start looking at the future now. Including unfunded liabilities, the US government owes $130,000,000,000,000! That’s 130 Trillion dollars!!! When the bubble pops, and it will, it will be a disaster for us all!